I too agree with the Cthulhu sleepwalking notion: nothing in Call of Cthulhu indicated that the Stars Were Right: the dreams in part I were in response to the events in part III. All that happened was a boat landed on a sticking-out fragment of R'lyeh and the crew opened the door to Cthulhu's bedroom. He devoured most of the sailors bothering him, stumbled around, got hit by a boat, which didn't really hurt him as he reformed immediately after (narrator describes him reforming in the wake of the boat) and went back to sleep.
This is why the fish-frogs (whose eldest leaders are Dagon and Hydra) don't just pop the doors of R'lyeh open and bang pots together until Cthulhu wakes up: the stars have to be right, and when they are no mortal action is going to make a difference.
I wouldn't be surprised about the dinosaur thing either: dinosaurs killed by space comet meant to kill cthulhu, accidentally liberating humanity to take over the globe? Sounds about right.
Lovecraft is obsessed with geologic time and paleontology and evolution and race (especially race) in their most lurid 19th century misapprehensions. Somehow, he retained every major bit of 19th century dread around evolutionary theory, the age of the universe, the death of god, the existence of dinosaurs and the insignificance of humanity and carried it through into the 1930s, long after half of the theories he seems to rely on were disproven.
Take any 19th century scientific mistake, be it phrenology or crazy theories about dinosaurs and Lovecraft is way ahead of you. E.g. tell me the fish frog people with their racist geneology (the Marsh's are Anglo-saxons who married East Asians who married fish frogs: the Cthulhu cultists and their war on pure-blooded white people
) have nothing to do with racist evolutionary 18th-19th century science that gave us charts like this
Hell, most of Lovecraft's cosmic terror is around evolution vs. geologic time: related here because Darwin was a geologist and the whole scale of time that evolution suggested was mind-blowing.
Thus all the Lovecraft and Co stories about time: Shadow out of Time, Ashton Smith's Ubbo-Sathla, and strange passages like the long section of in the Mountains of Madness when the geologist narrator uses the age of rocks used for sculptures to discuss the cultures of the old ones in insane scales of inhuman time: "in the Jurrasic era they had picnics, but then in the Creataceous era it was all about playing tag with shoggoth etc"